Sometimes, people can’t resist gutting the goose that lays the golden eggs.

As the United Auto Workers union signed tentative labor agreements late last month with each of Detroit’s “Big Three” auto manufacturers, everybody seemed to think the workers had thoroughly beaten management. “The UAW scored one of its biggest bargaining victories in decades,” the Wall Street Journal reported . “We won things nobody thought was possible.”

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UAW boss Shawn Fain gloated . He added later that the union “went to Ford with a goal of not leaving a dime on the table, and we accomplished that.”

Fain’s celebrations, however, entirely dodge the fact that the UAW’s shiny new compensation packages will gravely threaten organized labor’s long-term stability in the auto sector.

Consider the competition. Fain has secured concessions that far exceed the workers’ earnings at nonunionized American and foreign plants. This will reduce the competitiveness of UAW-hiring manufacturers, incentivizing them to operate in right-to-work states or foreign countries — or simply to automate faster. Any manufacturer that sticks doggedly with unionized labor will likely find itself outcompeted and losing market share to nimbler, leaner firms.

The UAW’s agreements with Ford, General Motors, and Stellantis are fairly similar. Workers will likely receive something like a 25% raise over 4.5 years, as well as better retirement benefits, higher compensation for part-time workers, and more. According to preliminary analysis of the GM deal , UAW members’ total compensation will rise from the mid-$60s to as much as $90 per hour. For reference, the average hourly worker compensation rates at nonunion and nonunion Tesla plants sit at $55 and $45, respectively.

Most union workers will likely earn well above $80,000 annually (roughly $42 per hour), and Ford says its new contract will add $850–$900 in labor costs per vehicle. In total, JPMorgan estimates the company will likely incur $1.5 billion (about 13% of its global operating profit) in new labor costs annually.

Besides these new operational costs, the UAW strike cost Stellantis roughly $3 billion, Ford roughly $1 billion, and GM $800 million. Considering all this, it seems foolish for auto manufacturers to cling to Detroit’s outmoded model of labor and manufacturing.

Too many observers of American politics assume that every fight between a union and an employer ought to culminate with a labor victory. This notion credulously relies on the notion that labor unions are cosmically aligned with “The Good” and corporations with “The Bad.” Economics, history, and human nature have many more complexities than this impoverished view of the world suggests. Just as some powerful corporations periodically take advantage of others, so too do labor unions , particularly when they enjoy outsize political or economic influence.

Any economic transaction invariably involves trade-offs and opportunity costs. Money and other resources are finite; once spent, even if spent toward a “good” purpose (e.g., higher wages), they cannot go to other uses. Gorging the union’s maw will slow productivity gains, price deflation, and technological innovation.

Reflexive pro-unionists have often lamented legacy American manufacturers’ supposed failure to compete with foreign brands such as Toyota and Honda, yet unions and the labor conflicts they specialize in stoking have historically damaged those same once-dominant manufacturing firms. Data suggest , moreover, that nonunionized plants manufacture more innovatively and efficiently than unionized ones.

Classical liberals (who usually prefer private-sector associations to government ones) have good reason to dislike and mistrust organized labor. Besides their longtime affiliations with radical political movements and habitual rent-seeking, unions tend to favor rigid, one-size-fits-all economic models that stifle innovation and market dynamism. In general, such behavior accrues wealth to a privileged few while costing the many; in this case, UAW has raked in benefits at the expense of American consumers who could see already inflated new car prices spike almost $1,000 more to offset the Big Three’s new labor costs.

Classically liberal or otherwise, those who cheer every union victory betray the fact that their arguments stem from subjective personal preferences,often driven by nostalgia, rather than sound economics.

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David B. McGarry is a policy analyst at the Taxpayers Protection Alliance.